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US prosecutors are investigating the relation of Signature Bank with crypto clients as regulators suddenly seized the lender last week.
According to the report from Bloomberg, US prosecutors opened a probe into Signature Bank’s association with its crypto clients on Tuesday. The investigators from US Justice Department were examining the bank in Washington and Manhattan, on whether or not the firm (now-collapsed) took the necessary steps to detect and prevent money laundering by its clients. It added that the SEC (Securities and Exchange Commission) was also monitoring the bank.
The news came out after New York’s financial regulator stated earlier that the decision of Signature Bank’s closure has “nothing to do with crypto”, but was spurred by what is called “a significant crisis of confidence in the bank’s leadership” after the collapse of Silicon Valley Bank.
The US Federal Deposit Insurance Corporation, which overtook the lender operations, refused to comment on the matter. The SEC, Department of Justice and Signature Bank did not immediately respond to the media request to comment on the report.
On Sunday (12-03-2023), the State regulators closed the New York-based Signature Bank. Its closure is the third largest failure in US Banking history, and it was just two days after the authorities shut down SVB (Silicon Valley Bank) in a collapse causing stranded billions in deposits.
The Signature Bank’s crypto deposits were quite significant as of last September, the bank gathered almost a quarter of its deposits from the crypto sector, but later in December 2022, it announced that it would shrink its crypto-related deposits by $8 billion.
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